I'll take a crack at addressing the confusion; hopefully I won't make it worse.
1. So the spin off company makes chips and sells them to other companies for their phones, whatever.
OK so far.
2. QCOM has the IP and the chip buyers send QCOM a check as well for the royalties? I get this because the spin off doesn't pay royalties to QCOM because they are sharing the patents...that's what Jacobs said, right?
As I understand it, all manufacturers of CDMA enabled devices will need a royalty-bearing agreement with QCOM because QCOM will continue to hold essential patents without which no CDMA unit can work.
3. The spin off makes all sorts of cross licensing deals to make multimode chips, whatever...they sell them, pay off some of the GSM/WCDMA patent people and QCOM gets a check from WHO for their IP royalties?
If Spinco makes cross-licensing deals I would expect they do not need to pay royalties because in exchange for the license (to GSM/W-CDMA IPR) they received, they gave a license to the cross-licensee for the CDMA stuff they control the IPR to (sorry the wording is a little clunky). Thsi assumes the cross-licensee is also a wirelss device manufacturer and needs CDMA IPR. (If not a manufacturer, yes Spinco woudl pay for the IPR they needed.) QCOM still gets its royalty as per 2. above. Nothing in the cross license deal touches the basic license CDMA manufacturers will need to get from QCOM.
4. >>>>(2) Eliminates Customer/Licensee Conflicts. As both a licensor and ASIC supplier, QCOM's two businesses are also in conflict. As more independent entities, this potential conflict is reduced. Customers can go to Spinco for chips and to Qualcomm for royalties.<<<<
Reason this is so is that ASIC group (now Spinco) needs other IPR (GSM, etc.) for multi-mode phones. Holders of that IPR were trying to use it to get full run of QCOM's essential patents in exchange. Now all they can get is access to the limited essential, and/or necessary, and/or useful patents that will be held by Spinco. The remaining patents stay with QCOM and require a royalty to QCOM to use them (i.e., to be able to sell a working CDMA device).
5. Why would people want to go to Qualcomm for royalties?
They may not want to but they will have to. (See 3. and 4. above.)
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